Saturday, June 27, 2015
7:02:04 AM EDT

Weekend Update! Open Position Status

by
Dot Hazlin

A choppy session ended the trading week, as the uncertainty over the Greece debt situation continues.
Other than the Dow, which was boosted by Nike's earnings report, broad indices closed lower for the week as investors remain cautious about the looming debt deadline for Greece on June 30.

Below is the current open position status:

SPX Weekly Iron Condor

This weekly position was entered Friday; position details below:

- SOLD SPX July 2145 Call, 1.30 Credit.

- BOUGHT SPX July 2155 Call, $.55 Debit.

- SOLD SPX July 1 2050 Put, 3.80 Credit.

- BOUGHT SPX July 1 2040 Put, 2.80 Debit.

Order was filled as an "Iron Condor" for $1.75 net credit (all four legs).

Margin/Risk is calculated by the width of the wings ($1,000), less credit received.

Margin/Risk for this week's trade: $825.

Target Gain: 7% of margin/risk or $58.

Max loss: 10% of margin/risk or $83.

The risk graph showing the position as of the close is below:

SPX July 1 Weekly Iron Condor

SPX closed Friday at 2101, down less than a point from the previous day, and posted a .4% loss for the week.

As of the close, the position is currently +$20 (debit is $1.55 to close). Our "good to cancel" exit order remains in place to close the position when the debit reaches $1.15, which would be target gain. The position will be closed at target gain, or if the pre-set max loss of 10% is reached. The position is fairly well centered going into next week.

Below is the 6 month chart showing the short strikes:

SPX 6 month chart

RUT July Iron Butterfly

This monthly position was opened Monday, June 22. Position details are:

Original Position:

- SOLD RUT July 1290 Call, 17.75 credit.

- BOUGHT RUT July 1340 Call, 1.05 debit.

- SOLD RUT July 1290 Put, 16.40 credit.

- BOUGHT July 1240 Put, 4.90 debit.

Order was filled as an "Iron Condor" for $28.20 net credit (all four legs).

Additional Order to cut Deltas on upside:

BOUGHT RUT June 1340 Call

Order for extra long call was filled for $1.30.

Margin/Risk is calculated by the width of the wings ($5,000), less credit received, plus the cost of the extra long call.

Margin/Risk for this trade: $2,310.

Target Gain: 5% of the gross margin ($250/contract)

Max loss: 10% of the gross margin ($500/contract)

On Friday, RUT reached the downside adjustment trigger point of 1280, and the position was adjusted as follows:

Downside Adjustment:

BOUGHT RUT July 1290 Put, 25.10 debit.

SOLD RUT July 1240 Put, 8.00 credit.

SOLD RUT July 1270 Put, 16.10 credit.

BOUGHT July 1220 Put, 5.00 debit.

Net debit (all four legs): $6.00 (mid price was 5.80 when the order filled)

The position summary after the adjustment is as follows:

SHORT RUT July 1290 Call

LONG RUT July 1340 Call

SHORT July 1270 Put

LONG July 1220 Put

The position is now a 20 point wide Iron Condor.

Below is the risk graph of this position as of the close Friday:

RUT July Iron Condor:

Below is a 6 month RUT chart indicating the short strikes:

RUT six month chart:

The position is currently -($25), centered between the short strikes. Target gain and max loss remain as outlined above.

The next adjustment trigger point will be at either short strike, depending on market conditions, position status, and market opinion.

For those unfamiliar with the strategy, the trade management guidelines were updated on October 22, 2014, and can be found here:
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